Microsoft has announced that on April 6 it will release a system update over Xbox Live that allows USB flash drive support for Xbox 360.

This means you’ll be able to use the drives for storing game saves, demos, profiles and more.

Once the USB drive is inserted -you can pop any flash drive over 1Gb into your Xbox 360 and configure it as storage – just head over to your memory section to configure it, and after the system runs an integrity check, you will then be able to configure how much storage to use on the device – up to 16 Gb.

The remaining space on the flash drive will be accessible by your PC or Mac.

The system won’t just configure the device once it is connected to the console so you’ll need to select your USB Device, and choose from Configure Now (Format and Configure the Full Device), or Customize (you can choose how much memory you want configured).

“USB Hard drives may work, but like flash memory, you’ll only be able to use up to 16Gb of space,” said The Major. “Since performance on flash based USB storage is usually better, I highly recommend using flash based instead of spinning media like a hard drive…it’s just going to give you a MUCH better experience.

“We’ve also enhanced the memory management functions, so you’ll be able to have better control on what you want to copy or move between storage devices”.

You can also have two devices connected to the console at a time, enabling up to 32Gb of simultaneous storage.

Microsoft is also partnering with SanDisk to release an Xbox 360 branded USB flash drive in May that comes pre-configured out of the box and ready to go.No price or exact sate on that yet.

The Major has posted some new screens to show you how to configure it should you not know how.

Oh thank God! About time. This will do wonders for games like WWE SmackDown vs RAW series, especially the latest. I ran out of CD-R's and haven't been able to upload new entrance themes for my CAW's like Sheamus and McIntyre nor update themes for my custom creations. I don't want to go buy more just for a few tracks since it's such a waste of space left over, and have always wanted to just put them on one of the many random USB sticks I have lying around but couldn't.

Will I be able to install games on my USB? I was thinking about upgrading my sad 20GB hard drive but if I can put game installs and DLC content on USB sticks I'll just go ahead and save myself the 90 bucks on a 360 hard drive.

Yep, game installs will also be supported. Unfortunately there is a artificial limit of 16 gigabytes per stick, with only two allowed at any one time. This is probably to ensure that sales of the hard drives do not dither.

Microsoft Corp. said officially that starting from the next software update for Microsoft Xbox 360 video game console it would prohibit usage of “unauthorized” storage devices on the system.

“When Preview Program members start receiving the Xbox 360 system update next week, one of the changes is that unauthorized memory units will no longer work with the Xbox 360. If you’ve moved your profile or saved games onto one to “back it up,” you’d better move it back onto an authorized Xbox 360 storage device prior to taking the update,” the official Xbox 360 blogger Major Nelson wrote.

Microsoft Xbox 360 game consoles are equipped with USB ports, thus, theoretically support all available flash USB memory sticks. However, Microsoft plans to limit support of memory sticks to only “licensed” devices. For example, Xbox 360 512MB memory unit costs $29 from Microsoft, which is a very high price for a 512MB USB flash stick.

So using USB storage devices was uncool until Microsoft decided that they could start selling them to people? Okay, that makes sense.